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Simple & Compound Interest
· History📜 History & Discovery
Babylonian clay tablets (2000 BCE) record loans at 20% annual interest. Roman law "centesimae usura" charged 1% monthly. Jacob Bernoulli (1683) discovered the constant e while studying compound interest — asking what happens when interest compounds infinitely often. This makes e ≈ 2.718 the most natural base for continuous growth.
⚡ 2026 Update
The Rule of 72 — divide 72 by the rate to find years to double — is shockingly accurate between 6% and 10%. A 7% Indian FD doubles in 72/7 ≈ 10.28 years; the exact figure is 10.24 years. Switching from 8% to 12% over 30 years can be the difference between ₹10 lakh and over ₹30 lakh.